2011 Clinical Staffing and Recruiting Survey. Indian Health Service The Reyes Building, 801 Thompson Avenue, Ste 400, Rockville, MD

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1 2011 Clinical Staffing and Recruiting Survey A survey of Indian Health program facility administrators examining their clinical staffing needs and recruiting patterns Indian Health Service The Reyes Building, 801 Thompson Avenue, Ste 400, Rockville, MD Conducted by Merritt Hawkins, an AMN Healthcare company

2 2011 Clinical Staffing and Recruiting Survey A survey of Indian Health program facility administrators examining their clinical staffing needs and recruiting patterns IN THIS REPORT introduction METHODOLOGY Key Findings QUESTIONS ASKED AND RESPONSES RECEIVED TRENDS AND OBSERVATIONS SURVEY RESPONDENTS NEEDS, ACCESS AND QUALITY RECRUITING PATTERNS TURNOVER RATES SALARIES AND REVENUE Administrator comments COMMENT RECEIVED FROM INDIAN HEALTH SERVICE ADMINISTRATORS KEY PRIORITIES CONCLUSION AND RECOMMENDATIONS ABOUT MERRITT HAWKINS Page 3 Page 4 Pages 5-6 Pages 7-23 Pages Page 25 Pages Pages Pages Pages Pages Pages Page 44 Pages Page 47 Indian Health Service The Reyes Building, 801 Thompson Avenue, Ste 400, Rockville, MD

3 INTRODUCTION What types of physicians and other clinicians are Indian health program facilities seeking? What challenges are they facing in recruiting these clinicians? What methods are they using to recruit, and which are the most effective? How long does the recruitment process take and what are the typical cost/ benefits involved? Dr. Yvette Roubideaux Director, Indian Health Service Through Merritt Hawkins, a national physician search and consulting firm, the Indian Health Service (IHS) initiated its 2011 Clinical Staffing and Recruiting Survey to provide answers to these and related questions. The goal of the survey is to identify common recruiting patterns at Indian health program facilities, to place these patterns in the context of the general clinical recruiting market, and to identify how Indian health program facility administrators believe IHS can assist them with their recruiting needs. To this end, the survey asked Indian health program facility administrators to provide data and commentary regarding their clinical staffing requirements, challenges, and incentives, and to suggest ways in which IHS can assist them in their recruiting and retention efforts. IHS/Key Priorities IHS is the principal federal health care provider and health advocate for Indian people providing a comprehensive health service delivery system for over 50 years. Indian health program facilities deliver health services directly to patients, many living in small, rural communities or urban areas that traditionally have been undeserved, thereby raising the health of American Indians and Alaska natives. The survey was conducted in support of IHS key priorities: 1. To renew and strengthen our partnership with tribes 2. To reform IHS strategies and processes 3. To improve quality and access to care for Indian health program patients 4. To make all of our work accountable, transparent, fair and inclusive This report includes results of the survey and an analysis by Merritt Hawkins regarding the survey s findings and implications, as well as a summary regarding how the survey acts to forward IHS key priorities outlined above. 3

4 METHODOLOGY IHS provided Merritt Hawkins with a list of some 400 Indian health program facilities and organizations to contact. In some cases, the list included the names of administrators affiliated with the facilities. In others, no names were attached to the facilities. A Merritt Hawkins representative refined this list by calling each facility to obtain the names and s of two administrators, where possible. In some cases, facilities on this list were community relations or general information offices only and do not provide clinical care. Surveys were not sent to administrators at these facilities. In other cases, facilities on the list have closed. In additional cases, facilities were branch offices of larger facilities administrated by the same person or persons. Merritt Hawkins representative identified the most appropriate person or persons to which to send the survey at each facility. Where two administrators were not present or were otherwise unavailable or unwilling to be contacted, one administrator s name and was obtained. The final list included 380 administrators located at 255 facilities. Merritt Hawkins ed the survey to these administrators on four separate occasions, once in December, 2010, twice in January, 2011 and once in February, A Merritt Hawkins representative called each administrator on the list who did not respond to the initial at least once, and called a number of administrators multiple times to encourage them to respond. IHS also ed the survey to administrators who did not respond to initial s sent by Merritt Hawkins. A total of 81 administrators responded, for a response rate of 21%. A breakdown of key survey findings and an analysis of findings are included in this report. ABOUT MERRITT HAWKINS 4 Established in 1987, Merritt Hawkins is the largest physician search and consulting firm in the United States and is a company of AMN Healthcare (NYSE: AHS), the largest healthcare staffing organization in the country. Merritt Hawkins conducts over 2,500 physician search assignments for hospitals, medical groups, government facilities and other entities each year nationwide. A leading source of physician recruiting research and commentary, Merritt Hawkins has completed various surveys used throughout the industry to benchmark physician recruiting incentives, physician revenue generation, physician career plans and related topics. Data and commentary generated by Merritt Hawkins have been cited in hundreds of media outlets, including The New York Times, The Wall Street Journal, Fortune, The Economist, USA Today, The Washington Post, U.S. News & World Report, Hospitals & Health Networks, Modern Healthcare, American Medical News and many others. Executives with Merritt Hawkins have authored hundreds of articles on physician staffing topics as well as three books, including Will the Last Physician In America Please Turn Off the Lights? A Look at America s Looming Physician Shortage; Merritt Hawkins Guide to Physician Recruiting; and In Their Own Words, 12,000 Physicians Reveal Their Thoughts on Medical Practice in America.

5 Key Findings Indian health program facilities serve a unique population of patients through Federal, Urban Indian and Tribal hospitals and clinics. Many of these facilities are in small, rural communities or urban areas that traditionally have been medically underserved. Consequently, a key challenge facing Indian health program facilities is the recruitment and retention of clinical professionals, including physicians, nurse practitioners, physician assistants, dentists, nurses and pharmacists. The 2011 Clinical Staffing and Recruiting Survey reflects the level of need for various clinicians at Indian health program facilities, the types of clinicians they are seeking, their typical recruiting costs and methods, turnover rates, and factors which enhance or impede their recruiting efforts. Key findings of the survey include Indian health program facility administrators indicated that primary care physicians are more urgently needed than any other type of clinical professional. 45% of Indian health program administrators indicated their facilities have an urgent need for primary care doctors, while 38% indicated they have a moderate need. Only 17% are fully staffed and have no immediate need for primary care physicians. The average vacancy rate for physicians reported by Indian health program administrators was 22%, considerably higher than the vacancy rates experienced by facilities in the private sector. Vacancy rates for other clinicians also are higher for Indian health program facilities than is generally seen in the private sector. Indian health program facility administrators indicated that 25% of physicians on their staffs are 61 years old or older, indicating that staff attrition looms as a serious challenge. Only 5% of all physicians in active patient care are 61 or older. Indian health service administrators report losing more clinicians in the last year than they were able to replace. Administrators report losing an average of 3.1 clinical professionals in the last 12 months but have only replaced an average of 1.7 of those they have lost. 50% of Indian health program facilities currently are recruiting primary care physicians. Dentists follow primary care physicians as the most urgently needed type of clinician. 38% of administrators indicated they have an urgent need for dentists, 33% said they have a moderate need, and 29% said they have no immediate need. 57% of Indian health program facilities currently are recruiting dentists. The majority of administrators (54%) said that a shortage of primary care physicians has compromised access to care in their service areas, while 48% said a shortage of dentists has compromised access to care. To a significant but lesser degree, access to care also has been compromised by shortages of specialist physicians, physician assistants, nurse practitioners, nurses, and pharmacists. 5

6 Close to half of administrators (46%) said quality of care in their service areas has been compromised due to a shortage of primary care physicians, while 41% said a shortage of dentists has compromised quality of care. The majority of administrators see a moderate to serious need for other types of clinicians. 55% are recruiting nurses, 49% are recruiting nurse practitioners, 37% are recruiting pharmacists, and 37% are recruiting physician assistants. Specialist physicians are considered the most difficult type of clinician to recruit by administrators, followed by primary care physicians and dentists. Though challenges persist, Indian health program facilities are enjoying some recruiting success. 64% of administrators said they had been successful recruiting one or more physicians in the last 12 months and 60% said they had been successful recruiting a dentist or nurse in the last 12 months. Administrators rate online advertising/clinical job sites, personal networking, and job postings on their own facility s site as the most effective methods for recruiting clinical professionals. Administrators identify paperwork/red tape as the factor having the most negative effect on clinician turnover at their facilities, followed by IHS policies and priorities, professional isolation, and spousal support/opportunities. 78% of administrators indicated they must interview at least three physicians to fill one opening. Administrators reported an average physician interview cost of $3,815 Salaries offered to physicians by Indian health program facilities tend to be significantly lower than national averages. Only 33% of administrators indicated that their facilities have a clinical recruitment and retention plan in place. Administrators are divided regarding the effect health reform will have on demand for clinicians at their facilities. 48% said health reform will greatly increase or somewhat increase demand for primary care physicians, while 52% said reform will either decrease demand for primary care physicians or have no effect on demand. Summary of Key Findings The survey indicates that Indian health program facilities are encountering recruiting challenges similar to private sector facilities, and, despite comparatively limited resources and strategic planning, are achieving some recruiting success. However, clinical vacancy rates are comparatively high at Indian health program facilities, and some facilities are challenged in addressing vacancies due to staff attrition, lack of planning, a dearth of resources, and administrative inefficiencies that may be hampering recruiting efforts. The recruiting patterns, metrics, challenges and requirements of Indian health program facilities are discussed in more detail later in this report. 6 Following is a breakdown of questions asked by the survey and responses received.

7 QUESTIONS ASKED AND RESPONSES RECEIVED 1 What is your title? Various, including: Executive Director, Health System Administrator, Clinical Director, Department Head, Acting CEO, Facility Director, Vice Chief of Medical Staff, Administrative Officer, PI Officer/IPC Coordinator, Administrator, CEO, Interim CEO, Health Director Assistant, Chief Medical Officer, Director of Human Services, SMSC Health Administrator, Health Administrator, Division Director/Health and Human Services, Chief Dental Officer/Acting Clinical C, Health Director, Clinic Administrator, Director of Health Services, Clinical Service Chief, Clinical Administrator, Human Resource Director, Physician, Health System Specialist, Director of Health Programs, Supervisor, I.H.S. Director 2 In what state is your facility located? California 18% South Dakota 3% Oklahoma 18% Colorado 2% New Mexico 9% Illinois 2% Washington 9% Kansas 2% Arizona 7.5% Louisiana 2% Alaska 4.5% North Dakota 2% Minnesota 4.5% Nevada 2% Montana 4.5% New York 2% Wisconsin 4.5% Rhode Island 2% Oregon 3% 3 What type of facility is your site? Federal Urban Indian Tribal 35% 5% 60% 7

8 In what community is your facility located? What size community do you serve? 4 5 Indian health program administrators were advised that they could complete the survey anonymously and that Merritt Hawkins would not share their names or locations or related data likely to identify them ,001-10,000 10,001-25,000 30% 26% 21% 25,001-50,000 50, , ,001 or more 15% 4% 4% How would you rate the need for additional 6 clinical professionals at your facility? Urgent Moderate No immediate need Primary care physicians 45% 38% 17% Specialist physicians 26% 32% 42% Nurse practitioners/physician assistants 29% 42% 29% Dentists 38% 33% 29% Nurses 28% 45% 27% Pharmacists 19% 35% 46% To what degree is a shortage of the following clinical professionals a 7 concern to your facility? serious Moderate no concern Primary care physicians 50% 33% 17% Specialist physicians 24% 38% 38% Nurse practitioners/physician assistants 28% 43% 29% Dentists 43% 29% 28% Nurses 32% 40% 28% 8 Pharmacists 26% 36% 38%

9 Is access to care in your service area compromised due to the shortage of 8 any of the following clinical professionals? yes no unsure Primary care physicians 54% 42% 4% Specialist physicians 46% 47% 7% Nurse practitioners/physician assistants 36% 59% 5% Dentists 48% 47% 5% Nurses 27% 65% 8% Pharmacists 23% 66% 11% Is quality of care in your service area compromised due to the shortage 9 of any of the following clinical professionals? yes no unsure Primary care physicians 46% 49% 5% Specialist physicians 40% 53% 7% Nurse practitioners/physician assistants 33% 59% 8% Dentists 41% 54% 5% Nurses 25% 65% 9% Pharmacists 22% 68% 10% In the last 12 months, have you recruited one or more physicians 10 to your site? Yes No 64% 36% 9

10 11 If yes, which types Which types of physicians 12 are you now recruiting? Family physician 40% Family physician 50% General internist 15% General internist 14% Pediatrician 7% Pediatrician 10% OB/GYN 7% OB/GYN 9% Anesthesiologist 5% Anesthesiologist 6% General surgeon Otolaryngologist 4% 0% Other: Neurologist, General surgeon Otolaryngologist 4% 0% Emergency physician Orthopedic surgeon 7% 0% Endocrinologist Podiatrist Cardiologist Emergency physician Orthopedic surgeon 12% 4% Other: Optometrist Psychiatrist Radiologist Ophthalmologist 11% 2% 2% Deputy clinical director Pediatrician Physical therapist Respiratory therapist Psychiatrist Radiologist Ophthalmologist 14% 5% 2% Psychologist Independent social worker Podiatrist Community health aide 13 What personnel system do you use to recruit clinicians at your site? Commissioned Corps Civil Service Tribal hire Other 49% 39% 61% 14% Other: Locum tenens agencies (3) Illinois Primary Health Care Association Contract nurses IHS Local advertisements Word of mouth Letter to residencies anything we can think of Website for IHS.gov 14 In the last 12 months, have you recruited one or more of the following? 10 Physician assistant Nurse practitioner Dentist Nurse Pharmacist 37% 48% 60% 60% 46%

11 15 Are you now recruiting any of the following? Physician assistant Nurse practitioner Dentist Nurse Pharmacist 37% 49% 57% 55% 37% 16 How difficult is it to recruit the following clinicians to your facility? Not difficult Somewhat difficult Very difficult Primary care physicians 11% 37% 52% Specialist physicians 19% 22% 59% Nurse practitioners/physician assistants 22% 51% 27% Dentists 21% 30% 49% Nurses 27% 48% 25% Pharmacists 28% 41% 31% Has it become easier or more difficult to recruit these clinicians over the 17 last 12 months, or has there been no change? easier more difficult no change Primary care physicians 10% 42% 48% Specialist physicians 24% 24% 52% Nurse practitioners/physician assistants 21% 48% 31% Dentists 22% 35% 43% Nurses 26% 45% 29% Pharmacists 29% 43% 28% 11

12 How do you believe health reform will affect the need for clinical 18 professionals at your site? Greatly increase Somewhat increase No change Decrease Primary care physicians 33% 27% 19% 33% Specialist physicians 44% 22% 20% 44% Nurse practitioners/physician assistants 37% 27% 19% 37% Dentists 40% 23% 19% 40% Nurses 38% 28% 22% 38% Pharmacists 45% 23% 19% 45% Typically, how long does it take to recruit a physician at your site, including 19 from the time the job is posted to the contract is signed? Primary care Specialists 0-90 days days days more than 365 days 19% 35% 27% 19% 6% 13% 48% 33% Typically, how long does it take to recruit physician assistants and nurse 20 practitioners to your site? days days days more than 365 days 26% 41% 21% 12%

13 On average, how many interviews must you conduct to fill one open spot on 21 your staff? physicians pas/nps or more 32% 39% 15% 5% 2% 7% 35% 45% 13% 5% 2% 0% What are the average costs associated with conducting one physician 22 interview? low average high Flights $300 $905 $3,000 Rental car $100 $204 $750 Accommodation $100 $285 $2,000 Meals/entertainment $65 $168 $1,000 Other $12 $2,253 $20,000 Total $577 $3,815 $26,750 Indian health program facilities are recruiting within the larger context of a rapidly evolving healthcare system and a medical staffing market characterized by clinician shortages. Many of these facilities express an urgent need for the same types of clinicians being sought by virtually all other types of medical facilities nationwide. 13

14 What methods do you use to recruit clinical professionals and how effective 23 are these methods? most Effective Somewhat effective Least Effective Online advertising/clinical job sites 27% 64% 9% Networking with your staff/community 44% 41% 15% Job openings posted on own website 23% 61% 16% Networking with residency training programs 24% 56% 20% IHS assistance/resources 26% 51% 23% In-house recruiting personnel 19% 52% 29% Exhibiting at professional conferences 14% 55% 31% Journal advertising 10% 54% 36% Contingent physician recruiting firms 6% 54% 40% Retained physician recruiting firms 5% 52% 43% Direct mail 5% 52% 43% 24 What is the vacancy rate for the following clinicians at your site? average Physicians Nurse practitioners Physician assistants Dentists Nurses Pharmacists 22% 19% 7% 20% 16% 8% How many clinical staff left your facility in the last year? low average high

15 26 Of those who left, how many have you replaced? low average high How has the turnover rate for these clinicians changed over 27 the last 12 months? increased decreased no change Physicians 21% 12% 67% Nurse practitioners 18% 9% 73% Physician assistants 13% 7% 80% Dentists 17% 17% 66% Nurses 37% 8% 55% Pharmacists 13% 11% 76% 28 To what extent is turnover a concern at your site? major concern moderate concern no concern Physicians 40% 35% 25% Other clinicians 33% 40% 27% 15

16 How would you rate the effect of the following factors on turnover among 29 clinicians at your facility? positive neutral negative Paperwork/red tape 10% 43% 47% IHS policies and priorities 13% 52% 35% Professional isolation 12% 53% 35% Spousal support/opportunities 34% 32% 34% Politics 15% 52% 33% Child care 27% 42% 31% Schools 29% 40% 31% Human resources 25% 44% 31% Adequacy of housing 31% 40% 29% Pay 41% 31% 28% Administrative duties 24% 51% 25% Cultural amenities 37% 42% 21% Administrative support 47% 34% 19% Information Technology 51% 31% 18% Mobility 21% 64% 15% Short-term/long-term training opportunities 28% 56% 16% Equipment 41% 43% 16% Appreciation in community 53% 32% 15% Support staff 64% 21% 15% Health care 36% 51% 13% Safety 40% 50% 10% the key to successful recruiting begins with front-end preparation in which stakeholders, incentives, contracts, candidate parameters, and candidate sourcing methods are aligned. 16

17 30 What is the average salary for the following clinicians at your site? low average high Family physicians $120,000 $165,552 $250,000 General internists $125,000 $174,423 $312,000 Pediatricians $110,000 $173,563 $274,000 Ob/Gyns $110,000 $182,227 $264,000 Anesthesiologists $140,000 $200,950 $250,000 General surgeons $175,000 $241,458 $290,000 Otolaryngologists N/A $175,000 N/A Emergency medicine $165,000 $187,810 $220,000 Ophthalmologists $125,000 $150,000 $175,000 Orthopedic surgeons $160,000 $167,500 $175,000 Psychiatrists $70,000 $168,926 $312,000 Radiologists $150,000 $155,175 $250,000 Nurse practitioners $70,000 $92,911 $125,000 Physician assistants $30,000 $84,582 $120,000 Pharmacists $75,000 $105,674 $160,000 Dentists $75,000 $129,487 $175,000 Nurses $30,000 $65,103 $100,000 Do clinicians at your site receive a straight salary only or are they compensated 31 with a salary plus a bonus based on productivity, quality, or other measures? Salary Only Salary and bonus 65% 35% Does your site offer local educational loan forgiveness/repayment or 32 supplemental loan repayment as part of the recruiting incentive package? Yes No 62% 38% 17

18 If yes, what is the total amount of loan forgiveness/repayment that you 33 offer and over what time period? Total Amount Time Period (in months) low average high $5000 $39,684 $90,000 low average high What is the payer mix at your site? low average high Medicaid 10% 40% 80% Medicare 4% 17% 45% SCHIP 1% 9% 30% Private pay 5% 21% 62% Other 1% 30% 69% 35 Please estimate how much net revenue (inpatient and outpatient) one fulltime equivalent physician generates for your site per year in the following specialties low average high Family physician $100,000 $387,263 $890,000 General internist $50,000 $290,000 $500,000 Pediatrician $30,000 $411,000 $887,719 Ob/Gyn $15,418 $321,000 $650,000 Otolaryngologist N/A $200,000 N/A Ophthalmologist $10,000 $145,102 $225,306 Orthopedic surgeon $39,089 $126,363 $200,000 Psychiatrist $20,000 $129,252 $300,000 Cardiologist $200,000 $350,000 $500, General surgeon $200,000 $525,000 $1,175,000

19 What are the average daily gross charges generated by the following 36 clinical professionals at your site? low average high Family physician $177 $2,100 $8,000 General internist N/A $600 N/A Pediatrician $177 $1,925 $5,000 Ob/Gyn N/A $27,110 N/A Otolaryngologist N/A NA N/A Ophthalmologist N/A $14,624 N/A Orthopedic surgeon N/A $4,909 N/A Psychiatrist $190 $732 $2193 Cardiologist N/A N/A N/A General surgeon N/A $40,000 N/A Physician assistant $2,000 $2,348 $4,268 Nurse practitioner $700 $2,570 $4,239 Pharmacist $987 $2,004 $3,525 Dentist $100 $1,266 $4, Consider the physicians on your staff. How do they break out by age? 40 or younger or older 26% 23% 26% 25% 19

20 38 Do you have a clinician recruitment and retention plan in place? Yes No 33% 67% The following factors attract clinical professionals to Indian health 39 program facilities? strongly agree moderatly agree do not agree Practice style 58% 39% 3% Cultural diversity 43% 52% 5% Mission-driven focus 40% 53% 7% Improving patient care 37% 51% 12% Geographic location 36% 32% 32% Financial rewards 32% 49% 19% Equipment/facilities 29% 51% 20% Lifestyle amenities 29% 46% 25% Quality improvement 28% 60% 12% Patient mix 27% 63% 10% 20 Administrators indicated that it typically takes them longer to recruit specialist physicians than primary care physicians, a not unexpected result given the difficulty of recruiting specialists to rural areas.

21 TRENDS AND OBSERVATIONS Overview The Recruiting Market The Indian Health Services 2011 Clinical Staffing and Recruiting Survey was conducted during a period of prevailing change in a health care delivery system characterized by a growing demand for physicians and other clinicians and a limited supply. The Association of American Medical Colleges (AAMC) forecasts that in 15 years the United States will face a deficit of up to 159,300 physicians, over one-third of them in primary care.1 This projection does not factor in the implementation of health reform, which is expected to increase the ranks of the insured by some 32 million people. Should health reform or other measures succeed in achieving near universal access to health insurance, an additional 31,000 physicians will be needed, the AAMC projects. Physicians are not distributed evenly throughout the population, and consequently shortages tend to be concentrated in rural or inner city areas. The Department of Health and Human Services (HHS) currently designates over 6,200 primary care Health Professional Shortage Areas (HPSAs) nationwide in which 65 million Americans live. Sixty-seven percent of these areas are in non-metropolitan communities in which Indian health program facilities typically are located. Physicians are not the only type of health professional in short supply. The number of dentists trained in the United States is not keeping pace with demand. The number of dental school graduates peaked in 1982 at 5,750, then declined for 16 consecutive years and stands at about 4,500 today.2 During that time, over 75 million people were added to the U.S. population, according to the U.S. Census Bureau. An emerging shortage of dentists also is characterized by a maldistribution of providers in many rural and inner city areas. As of April, 2009, HHS designated 4,091 dental HPSAs in the U.S., in which 49 million people live. Nurses also are in short supply, a trend that has been well documented in recent years. HHS has projected a national deficit of one million nurses in the coming decade. This projection has been tempered by the economic downturn which has seen a large number of nurses who were retired or engaged in non-clinical activities return to the clinical workforce. Nevertheless, noted academic Peter Beurhaus projected in the July/August 2009 issue of Health Affairs that the nurse shortage will grow to 260,000 registered nurses by A shortage of this magnitude would be twice as large as any nursing shortage experienced in the United States since the mid-1960s. Nurse practitioners (NPs) and physician assistants (PAs) are being looked to throughout the healthcare industry as a supplement to a strained physician workforce. However, Richard Cooper, M.D. of the University of Pennsylvania projects that the supply of PAs and NPs will be 20% less than demand by In addition, like physicians, many NPs and PAs have chosen to specialize and therefore are not available to supplement the primary care physician workforce, where demand for doctors is considered to be greatest. Only 45% of PAs and only 59% of NPs practice primary care. 3 1 Dill MJ, Saldberg ES, Association of American Medical Colleges. The Complexities of Physician Suppl and Demand, November Staff Care Trends: The Growing use of Locum Tenens Dentists, March American Association of Nurse Practitioner database, 2009, and American Association of Physician Assistants: aapa.org 21

22 Emerging clinician shortages were apparent prior to health reform, which is expected to have a profound impact on how healthcare is delivered in the United States. Among other factors, health reform promotes efficiency gains by encouraging a restructuring of health care delivery into value rather than volume driven models such as Accountable Care Organizations (ACOs). It further promotes the use of preventive care and electronic medical records, measures which may have some effect on reducing utilization of healthcare services. Nevertheless, it is difficult to foresee how the addition of over 30 million patients to the ranks of the insured can be accomplished without a corresponding increase in demand for physicians and other clinical professionals. It is within this context that IHS examined the staffing needs and patterns of Indian health program facilities through this survey. Merritt Hawkins analysis of survey responses will seek to place these needs and patterns within the wider context of the current and projected clinical staffing market as viewed through existing research and our recruiting experience with hospitals, medical groups and other health care facilities nationwide. In addition, we will provide our opinion regarding the recruiting patterns of Indian health program facilities as depicted in this survey, indicating those areas where facilities appear to be operating efficiently and in line with recruiting industry standards and where there may be an opportunity for efficiency gains or practice modifications. SURVEY RESPONDENTS The 2011 Clinical Staffing and Recruiting Survey was sent by to administrators and others with executive titles at Indian program facilities nationwide. The majority of responses (60%) came from Tribal facilities, 35% came from Federal facilities and five percent from Urban Indian facilities. The majority of responses (77%) were from administrators whose facilities serve 25,000 or fewer residents and can be considered semi-rural to rural. Nineteen percent were from administrators whose facilities serve moderate sized communities ranging from 25,001 to 100,000 people. Four percent were from administrators whose facilities serve urban areas of 100,001 people or more. The survey, then, largely represents a rural staffing experience that is most appropriately compared and contrasted to the experience of non-indian health program facilities serving similar small communities with which Merritt Hawkins works. 22 Responses came from administrators from 19 states, with the majority of responses 54% coming from four states; California, New Mexico, Oklahoma and Washington. Geographic variance represented in the survey therefore is somewhat limited.

23 NEEDS, ACCESS AND QUALITY It is assumed that virtually all Indian health program facilities provide some level of primary care services, either through primary care physicians or through non-physician clinicians such as PAs and NPs, while a lesser number provide specialty care, dental services, or pharmacy services. Areas of Need Not surprisingly, the greatest need for clinicians as indicated by the survey is in primary care -- the broadest area of service provided. Forty-five percent of administrators indicated they have an urgent need for primary care physicians, while 38% expressed a moderate need. Fewer than one in five (17%) indicated they are fully staffed in primary care and have no immediate need. This response is consistent with what Merritt Hawkins has observed nationwide among hospitals and medical groups. Family physicians and general internal medicine physicians are the two most requested search assignments we have received for the last five years. Approximately 65% of the healthcare facilities we have contacted in the last six months have indicated a need for primary care physicians. The supply of primary care physicians has been constrained in recent years as medical school graduates have gravitated toward higher paying specialty areas. Indeed, the number of residents choosing primary care declined by 60% between 1998 and Health reform includes provisions to stimulate medical student interest in primary care, but shortages are projected for the foreseeable future. Though not all Indian health program facilities provide dental services, 43% of administrators indicated their facilities have an urgent need for dentists and 29% said they had a moderate need. The emerging shortage of dentists has been observed by Staff Care, a company affiliated with Merritt Hawkins which staffs temporary (i.e.,locum tenens) clinicians. Staff Care received virtually no requests for temporary dentists prior to 2005 but received requests to fill over 10,000 days with temporary dentists in 2010, mostly on behalf of government run or funded facilities. In most cases, facilities are using locum tenens dentists to maintain services while they seek hard-to-find permanent candidates. The urgent need for dentists expressed by many Indian health program facility administrators is therefore in line with what Merritt Hawkins and its affiliated companies are seeing in the overall healthcare market. 4 Newsweek: September 12th,

24 Twenty-nine percent of administrators indicated their facilities have an urgent need for NPs and/or PAs, while 43% said they have a moderate need. Unlike primary care medicine and dentistry, where the number of providers being trained annually has been flat in recent years, the number of PAs and NPs trained annually has increased in recent years. In general, NPs and PAs are therefore often easier to recruit than physicians. However, demand for PAs and NPs is not likely to keep pace with supply in primary care as many PAs and NPs have chosen to specialize. In addition, the team approach to health care delivery, promoted by the health reform act through the medical home concept, is likely to increase demand for primary care PAs and NPs, who will be assuming more duties as primary care physicians focus on overall coordination of comprehensive care. Indian health program facilities and other facilities may therefore face increased challenges in recruiting these clinicians. Twenty-eight percent of administrators indicated their facilities have an urgent need for nurses, while 45% said they have a moderate need. The severity of the nurse shortage has abated since the economic downturn began in 2008, as nurses otherwise occupied returned to the clinical workforce and as utilization of health services (particularly elective services) has declined. Nevertheless, only 27% of administrators indicated their facilities are fully staffed with nurses and have no immediate need for more. This is not generally consistent with what Merritt Hawkins and its affiliated nurse staffing companies are observing in the field, including in rural areas, suggesting Indian health program facilities may have particular challenges in nurse recruiting not being experienced throughout other segments of the healthcare system. In many cases, smaller communities are able to grow their own nurses and often do not have as high a nurse vacancy rate as larger, urban facilities. As a result, Merritt Hawkins affiliated nurse staffing companies only infrequently work in rural areas. By contrast, Merritt Hawkins, which specializes in physician recruiting, often works in such areas, which often do experience high physician vacancy rates. Twenty-six percent of administrators indicated their facilities have an urgent need for specialist physicians, while 32% said they have a moderate need. Media and policy maker attention has largely been focused on the shortage of primary care physicians in recent years, obscuring to some degree the fact that shortages in specialty areas also have emerged. Shortages are particularly acute in general surgery, where the supply of new surgeons is stagnant. In 1980, 945 newly trained general surgeons were certified in the U.S. In 2008, the number was virtually the same (972) despite a population increase of over 75 million people. 5 Shortages also are particularly acute in psychiatry, one of the oldest specialties in which 52% of practitioners are 55 or over, according to the American Medical Association s Physician Master File. Indian health program and other facilities can expect recruiting challenges in these two specialties to be particularly intense moving forward. Nineteen percent of administrators expressed an urgent need for pharmacists at their facilities, while 35% expressed a moderate need. The economic downturn has suppressed demand for pharmacists, which was steadily escalating prior to 2008, largely as a result of the retail boom. Nevertheless, over half of those surveyed indicated a need for pharmacists at their facilities, though vacancy rates for pharmacists reported by IHS facility administrators are smaller than those for most other types of clinicians. These lower rates may be due in part to the fact that some IHS facilities are not staffed with pharmacists and therefore did not report vacancy rates. The relatively high rate of need for pharmacists indicated by the survey suggests Indian health program facilities may be experiencing particular challenges in recruiting pharmacists that are not generally being experienced by other segments of the healthcare system Brown D. Shortage of General Surgeons endangers rural Americans, Washington Post, January 1st, 2009.

25 Quality of Care and Access Compromised Shortages of clinicians present a serious concern to Indian health program administrators responding to the survey, with the greatest concern focused on primary care physicians and dentists. Eighty-three percent of administrators indicated that a shortage of primary care physicians at their facilities was a cause of serious or moderate concern and 72% said a shortage of dentists was a cause of serious or moderate concern. However, concern about clinician shortages was reflected across the spectrum of providers. The majority of administrators (62%) expressed at least moderate to serious concern over shortages of specialist physicians, NPs and PAs, nurses, and pharmacists. Administrators also indicated that clinician shortages have led to compromised access to care in their service areas. The majority (54%) said that a shortage of primary care physicians has compromised access to care in their areas, 48% said a shortage of dentists has compromised access, and 46% said a shortage of specialist physicians has compromised access. Shortages of PAs/NPs, nurses and pharmacists also have compromised access according to at least 23% of administrators. Poor access to care often leads to poorer quality of care, which appears to be the case for some of the administrators surveyed. Forty-six percent said that a shortage of primary care physicians has compromised quality of care in their areas, 41% said a shortage of dentists has compromised quality, and 40% said a shortage of specialty physicians has compromised quality. Shortages of other clinicians also have compromised quality, though to a lesser degree. Thirty-three percent of administrators indicated a shortage of NPs/PAs has compromised quality of care in their areas, 25% said a shortage of nurses had compromised quality of care, and 22% said a shortage of pharmacists had compromised quality of care. How these results compare to other segments of the healthcare system is difficult to ascertain. However, in a 2009 survey of acute care hospital administrators (none of them within the IHS system) conducted by AMN Healthcare (Merritt Hawkins parent company) only 19% of administrators said that quality of care in their service areas had been compromised due to a shortage of physicians, only 11% said quality had been compromised due to a shortage of nurses, and only 5% said quality had been compromised due to a shortage of pharmacists. Of these administrators, 35% serve with hospitals in communities of 25,000 or less, and 32% serve with hospitals in communities of 25,001 to 100,000 people. The remaining 33% serve with hospitals in communities of 100,001 people or more. The majority (66%), therefore, serve in moderate to smaller communities where staffing challenges may parallel to some degree of IHS facilities. Lack of Planning Given the urgent need for clinicians expressed by many Indian health program facility administrators, it is somewhat surprising that some two-thirds of administrators (67%) indicated their facilities do not have a clinician recruitment and retention plan in place. Similarly, in IHS 2011 Survey of Physician Practice Patterns and Career Satisfaction, 67% of IHS facility physicians said their facilities either do not have a recruitment and retention plan in place or they do not know if such a plan is in place. In Merritt Hawkins experience, lack of a staff plan is not uncommon in smaller healthcare facilities that are focused on daily rather than strategic challenges and which do not have personnel dedicated to recruitment. However, a formal plan featuring goals, benchmarks and physician involvement can be critical to consistent recruiting success. 25

26 RECRUITING PATTERNS Indian health program facilities are actively engaged in the recruitment of a range of clinicians with a focus on dentists, nurses, family physicians and nurse practitioners. Fifty-seven percent of administrators are recruiting dentists, 55% are recruiting nurses, 50% are recruiting family physicians and 49% are recruiting nurse practitioners. In the last 12 months, Indian health program administrators have achieved some recruiting success. The majority (64%) have recruited at least one physician, while the remaining 36% have either been unsuccessful or have not attempted to recruit. In Merritt Hawkins experience, many facilities serving small, rural populations can go a year and sometimes much longer without being able to recruit a physician, suggesting that the Indian health service model and the way it is being presented has generated some appeal among physicians. This point is further substantiated by IHS 2011 Survey of Physician Practice Patterns and Career Satisfaction. Eighty-five percent of IHS facility physicians responding to this survey indicated they have practiced in both IHS and non- IHS facilities. Of these, 78% said working with IHS facilities is either more satisfying or as satisfying as working with non-ihs facilities. In addition, 70% of IHS physicians surveyed said they now find medical practice to be very satisfying or somewhat satisfying. By contrast, only 34% of non-ihs physicians surveyed by Merritt Hawkins said they now find medical practice to be very satisfying or somewhat satisfying. The 2011 Clinical Staffing and Recruiting Survey indicates that forty percent of administrators have had success in the last 12 months recruiting primary care physicians, 15% have recruited general internists, and 11% have recruited psychiatrists, all difficult searches to fill. Fifty percent of administrators indicated they are now recruiting family physicians, 14% are recruiting general internists, and 14% are recruiting psychiatrists, 12% emergency physicians, and 10% pediatricians. A majority of administrators (60%) have had success recruiting dentists and nurses in the last 12 months, while 48% have recruited nurse practitioners and 46% have recruited pharmacists. The majority (57%) are now recruiting dentists, 55% are recruiting nurses and 49% are recruiting nurse practitioners. Areas of Difficulty Of these clinicians, physician specialists are deemed the most difficult to recruit by the administrators surveyed. Fifty-nine percent of administrators rated specialists as very difficult to recruit, a number reflecting the experience of many rural facilities with which Merritt Hawkins has worked. Specialists generally require a wider referral network, more sub-specialty support, and more sophisticated equipment than is typically available in small communities. 26 Fifty-two percent of administrators rated primary care physicians as very difficult to recruit, reflecting the limited supply and intense competition for providers in this area, while 49% rated dentists as very difficult to recruit. Nurses, by contrast, were only rated difficult to recruit by 25% of administrators, reflecting the general easing of supply constraints resulting from the economic turndown. Though the majority of IHS facility administrators (64%) have succeeded in recruiting at least one physician in the last 12 months, the process is nevertheless deemed to be challenging by many, and 50% of administrators describe the shortage of primary care physicians at their facilities as a serious concern.

27 In general, administrators indicated that clinicians have become more difficult to recruit over the last 12 months rather than less, as might be expected given the supply and demand trends referenced above. For example, 42% of administrators said primary care physicians have become more difficult to recruit while 10% said they have become less difficult to recruit. Administrators are mixed on their views of specialist physicians, however. An equal number (24%) said they have become easier to recruit as said they have become harder to recruit. This reflects trends in the overall specialist market in which payment and utilization patterns have suppressed demand for certain types of specialists (radiologists, anesthesiologists) who are now somewhat easier to recruit, while having little effect on others (general surgeons, psychiatrists) who remain difficult to recruit. Recruiting Time-Frames Nineteen percent of administrators indicated that it typically takes them 90 days or less to recruit a primary care physician. Based on recruiting industry standards, in which it is common for such searches to take 180 days or more, some Indian health program facilities are experiencing extremely efficient search completion times. An additional 35% of administrators indicated they are completing primary care physician searches between days, also an efficient time frame. Just over one quarter (27%) are completing primary care searches between days, a somewhat inefficient but not uncommon time frame. The remaining 19% are completing primary care searches in more than 365 days, a generally inefficient though not unheard of time frame. Administrators indicated that it typically takes them longer to recruit specialist physicians than primary care physicians, a not unexpected result given the difficulty of recruiting specialists to rural areas. Only six percent of administrators indicated they typically complete specialist searches in 30 days or less, while 33% indicated it typically takes more than 360 days to complete a specialist search. In general, time frames to recruit primary care physicians to Indian program facilities are within industry efficiency standards, whereas time frames to recruit specialists are somewhat longer than industry standards. Sixty-seven percent of administrators indicated they are able to recruit NPs and PAs within 180 days, a time frame consistent with industry standards. A minority (12%) require over 365 days to recruit NPs and PAs, a time frame typically longer than industry standards. Interviews Per Physician The majority of administrators (71%) indicated they conduct four or fewer interviews in order to place one physician, while 29 percent require five or more interviews. Industry standards vary, but as a general rule an efficient physician search can be completed within two interviews, given clear candidate parameters and communication, though three to four interviews is not uncommon. While some administrators are interviewing efficiently, an opportunity appears to exist for many Indian health program facilities to achieve a more efficient interview to placement ratio. Such ratios typically are achieved through in-depth front-end preparation during which candidates are rigorously screened. Administrators reported an average candidate interview cost of $3,815, including flights, rental car, accommodation, meals/entertainment and other. The unspecified other category accounted for $2,253 of the total average expense, and no data in the survey accounts for the nature of the other category. Excluding the other category, the average interview expense was $1,562, an amount closely in line with what Merritt Hawkins sees as a national average. 27

28 Methods of Recruiting Administrators indicated they use a range of methods to recruit clinicians, including online advertising, job postings on their web sites, journal advertising and a variety of others. Networking with their staff and community was rated a most effective recruiting method by 44% of administrators, followed by online advertising (27%), IHS assistance and resources (26%), networking with residency programs (24%), and posting jobs on their own web sites. Networking through personal contacts and residency programs has traditionally been the key method by which health facilities recruit, and online tools have largely replaced journal advertising, suggesting that Indian health program facilities are in tune with the general market in their utilization of recruiting resources. Administrators were asked to rate the factors that attract candidates to Indian health program facilities. Fifty-eight percent said they strongly agree that practice style is an attraction, 43% strongly agree cultural diversity is an attraction, and 40% strongly agree a mission-driven focus is an attraction. In IHS s 2011 Survey of Physician Practice Patterns and Career Satisfaction, IHS facility physicians were asked what they find satisfying about working with IHS facilities. Eighty-seven percent said they find overall IHS practice style to be very satisfying or somewhat satisfying. IHS administrators responding to the Clinical Staffing and Recruiting Survey therefore are validated in thinking that the IHS practice brand is one of their strongest physician recruiting assets. An even higher number of IHS facility physicians (89%) surveyed said they find mission-driven care to be a very satisfying or somewhat satisfying aspect of IHS practice. As noted in the 2011 Survey of Physician Practice Patterns and Career Satisfaction, many physicians today are disillusioned with the current medical practice environment and the diminishing emotional rewards it offers. Many such physicians embark on medical missions to experience these rewards. IHS practice allows physicians to achieve the emotional satisfaction derived from such missions in their daily practice, a key recruiting advantage and a central component of the IHS practice brand. Indian health program facilities clearly are recruiting on the basis of a unique practice style that narrows the candidate pool to physicians who are seeking alternatives to the prevailing practice environment, which in Merritt Hawkins experience is the appropriate approach. 28